Correlation Between AFC Energy and Tantalus Systems
Can any of the company-specific risk be diversified away by investing in both AFC Energy and Tantalus Systems at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining AFC Energy and Tantalus Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AFC Energy plc and Tantalus Systems Holding, you can compare the effects of market volatilities on AFC Energy and Tantalus Systems and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in AFC Energy with a short position of Tantalus Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of AFC Energy and Tantalus Systems.
Diversification Opportunities for AFC Energy and Tantalus Systems
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AFC and Tantalus is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding AFC Energy plc and Tantalus Systems Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tantalus Systems Holding and AFC Energy is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on AFC Energy plc are associated (or correlated) with Tantalus Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tantalus Systems Holding has no effect on the direction of AFC Energy i.e., AFC Energy and Tantalus Systems go up and down completely randomly.
Pair Corralation between AFC Energy and Tantalus Systems
Assuming the 90 days horizon AFC Energy plc is expected to under-perform the Tantalus Systems. In addition to that, AFC Energy is 1.17 times more volatile than Tantalus Systems Holding. It trades about -0.02 of its total potential returns per unit of risk. Tantalus Systems Holding is currently generating about 0.1 per unit of volatility. If you would invest 61.00 in Tantalus Systems Holding on November 5, 2024 and sell it today you would earn a total of 89.00 from holding Tantalus Systems Holding or generate 145.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.4% |
| Values | Daily Returns |
AFC Energy plc vs. Tantalus Systems Holding
Performance |
| Timeline |
| AFC Energy plc |
| Tantalus Systems Holding |
AFC Energy and Tantalus Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AFC Energy and Tantalus Systems
The main advantage of trading using opposite AFC Energy and Tantalus Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AFC Energy position performs unexpectedly, Tantalus Systems can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tantalus Systems will offset losses from the drop in Tantalus Systems' long position.| AFC Energy vs. Legrand SA ADR | AFC Energy vs. Loop Energy | AFC Energy vs. Sunrise New Energy | AFC Energy vs. Alfen NV |
| Tantalus Systems vs. Signify NV | Tantalus Systems vs. AFC Energy plc | Tantalus Systems vs. Loop Energy | Tantalus Systems vs. Hydrogen Engine Center |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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